The M&A Perspective

Anti-Corruption Legislation – On the Road to Global Zero-Tolerance?


Under Swiss law, bribery in a private context used to be an offense which was only prosecuted upon a complaint lodged by a victim. It was not perceived to be in the public interest to enforce law and order in that area in each and every case. Times change and with it also the anti-bribery legislation: Since 1 July 2016, Switzerland prosecutes bribery ex officio also if it is committed in a private context. Exceptions only apply to certain minor cases.

The change in Swiss legislation is only one of numerous efforts worldwide to clamp down on corruption. Most prominently, in an effort to target violations of the Foreign Corrupt Practices Act (FCPA), the U.S. Department of Justice (DOJ) announced in April 2016 that it is launching a one-year Pilot Program which aims at motivating companies to voluntarily disclose FCPA-related misconduct in order to receive a mitigation credit. This step followed the so-called Yates Memo, a memorandum issued to all federal prosecutors by Deputy Attorney General Sally Quillian Yates on 9 September 2015, in which the DOJ directed prosecutors to focus in their investigations of corporate wrongdoing on seeking accountability from the individuals who perpetrated the wrongdoing. As is known, Ms Yates has since left office but the Program seems to be here to stay. Just recently, the DOJ announced that the Program will continue in full force until the DOJ determines "whether to extend it, and what revisions, if any, we should make to it". The DOJ's extension of the Pilot Program indicates that aggressive FCPA enforcement is likely to continue, at least for the foreseeable future whilst the DOJ evaluates the Pilot Program.

While the detection of corruption is nowadays generally on the radar in M&A processes, the increased focus and the multiple efforts of state authorities around the globe to reveal and effectively punish illegal practices in that area make a careful assessment and analysis of a target business' practices more than ever an essential – if not vital – part of every due diligence process.


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